Conflict avoidance, management and dispute resolution procedures

Question 1

What procedures can you adopt to avoid disputes?

Answer 1

1) Clear contract documents and terms of engagement

2) Effective communication procedures between all parties

3) Accurate record keeping

4) Issuing written correspondence to confirm actions and decision taken

5) Follow company and contractual procedures

6) Follow RICS standards and professional guidance statements

Question 2

What are the types of conflict?

Answer 2

1) Party conflicts

2) Own interest conflicts

3) Confidential information conflicts

Question 3

What is a party conflict?

Answer 3

When an RICS member is acting for both sides in the same or related professional assignment.

Question 4

What is an own interest conflict?

Answer 4

RICS member acting for a client with personal interests in the assignment.

Question 5

What is a confidential information conflict?

Answer 5

RICS member needing to provide info to the client that is confidential info to another client

Question 6

What is the RICS guidance in this area?

Answer 6

RICS Global Conflicts of Interest Professional Statement (2017)

Question 7

What is informed consent?

Answer 7

Consent willingly given in writing by a party who may be affected by conflict of interest stating that they understand the conflict and agree to continue the instruction with the conflict in place.

Question 8

What is important when deciding to continue with an instruction when a conflict is present and informed consent obtained?

Answer 8

Ensuring that I am still competent and can act independently and still provide diligent advice.

Question 9

Every RICS member must do what with regards to conflicts?

Answer 9

1) Identify and manage conflict of interest in accordance with the professional statement.

2) Keep records of decision made in relation to continuing with the instruction and information regarding informed consent and information barriers.

Question 10

How should a conflict be handled?

Answer 10

1) Decide whether the conflict compromises your advice and should be avoided or if it can be managed.

2) Obtain written advice from both parties if decide to go ahead i.e. informed consent.

3) Manage conflict though setting up information barrier and keep record of management.

Question 11

What is the RICS UK conflict document?

Answer 11

RICS Conflicts of Interest UK Commercial Property Market Investment Agency Professional Statement

Question 12

What are the three types of agency conflicts in the UK professional statement?

Answer 12

1. Dual agency
2. Multiple introductions
3. Incremental advice

Question 13

What is dual agency?

Answer 13

Where agent has a contractual relationship with the buyer and seller.

Question 14

What is multiple introductions?

Answer 14

Acting for multiple buyers who have interest in similar properties.

Question 15

What is incremental advice?

Answer 15

Where agent is acting for seller on a disposal and they are approached by the buyer for a valuation.

Question 16

What is an own interest conflict and what legislation is it linked to?

Answer 16

Acting when there is a personal interest.

Section 21 Estate Agents Act 1979 - disclosure of personal interests

Question 17

What do you do when a complaint has not been satisfied using your CHP?

Answer 17

Refer to alternative dispute resolution methods (ADR)

Question 18

What are the three main processes available in resolving disputes?

Answer 18

1. Negotiation- between parties themselves.
2. Mediation or conciliation - third party intervention (not binding but can be if agreed)
3. Adjudicative process - third party determination such as litigation and arbitration

Question 19

What are the advantages of ADR?

Answer 19

1. Speed
2. Informality
3. Cheaper
4. Greater opportunity for negotiation

Question 20

What is mediation?

Answer 20

Third party mediator is appointed who facilitates discussions between two parties to find a solution.

The process is informal, confidential and not legally binding.

Question 21

What is conciliation?

Answer 21

Used by mutual consent of both parties, under the ICE procedure there is no right of either party to object to the appointed conciliator.

Very similar to mediation in a supported style of negotiation.

The main difference is that in the event negotiations break down, the conciliator will prepare a recommendation setting out how the dispute should be resolved.

If neither party objects within one month, this then becomes final and binding.

Question 22

What are three formal forms of dispute resolution?

Answer 22

1. Arbitration
2. Litigation
3. Adjudication

Question 23

What would you consider to select a form of dispute resolution?

Answer 23

1. The cost in proportion to the claim
2. The timescales involved
3. The impact on business relationships and reputation

Question 24

What is arbitration?

Answer 24

Use of arbitrator who has specialist knowledge of the subject area.

Parties are bound by the decision from an arbitrator.

Fast, cost effective and confidential solution to a dispute.

Question 25

What other RICS documents refer to conflicts of interest?

Answer 25

1. Rules of Conduct
2. RICS Valuation - Global Standards

Question 26

What is the difference between arbitration and litigation?

Answer 26

Arbitration

• Governed by Arbitration Act 1996
• Must be agreed by both parties
• Parties have a wide degree of discretion as to way proceedings are conducted
• Similar to litigation with formal submission by parties, expert evidence, hearings and decision by arbitrator
• Advantages: private process, parties have flexibility, arbitration awards generally easier to enforce
• 3 types: short hearings (1 month), documents only (1 month) and full procedure

Litigation

• Presentation of arguments in court
• Public process following Civil Procedure Rules
• Advantages: Parties do not pay for court or judge, process can deal with multi-party disputes, civil procedure rules aim for accessibility, speed and efficiency

Question 27

What is your firm’s complaints handling procedure?

Answer 27

1) Details of the complaint must be made in a written summary, giving as much detail as possible and sent to the firm’s Complaint Handling Officer.

2) Acknowledge the complaint within 7 days and invite complainant to make comments.

3) Within 28 days of receipt of the written summary, contact the complainant to inform them of the outcome of the investigation.

4) If the complainant remains dissatisfied with any aspect of handling of the complaint, then attempt to resolve through negotiations.

5) Is still dissatisfied, refer complaint to Arbitration Procedure for Surveying Disputes or the Centre for Effective Dispute Resolution.

Question 28

What are the common causes of disputes?

Answer 28

1. Poor communication
2. Misunderstandings
3. Personal differences
4. Errors or omissions